Grains ease, while livestock start higher Friday but then cattle fade.
Scott Varilek with Kooima Kooima Varilek says some live cattle futures contract initially made more new highs for the move on hedge lifting and Thursday’s higher cash trade.
Cash in the South ranged from $189 to $191 but mostly $190 which is up $2 from last week.
Northern cash trade ranged from mostly $298 to $302 dressed with $190 to $192 live sale prices.
Live cattle initially priced this in and the April contract even got above $190 but other contracts ran into resistance areas on the charts and consolidated.
The market is also gearing up for USDA’s Cattle on Feed Report this afternoon and so there could be some positioning in the cattle market ahead of that.
Placements are expected to be down 4% from a year ago but last October the market was thrown a surprise with a huge increase in placements that resulted in a selloff.
Varilek says the cattle market may be due for a slight correction but the setup fundamentally is bullish.
Lean hog futures scored a reversal Thursday and are trying to recover Friday but are looking toppy.
Grains are easing early Friday with farmer selling picking up and some profit taking as many contracts are into resistance on the charts.
In fact, November soybeans got above $10 but then closed below that level putting in a possible bearish reversal and technical traders are selling on that Friday morning.
South America is also expected to continue to get rain and so are wheat areas of the Southern Plains so the grain market may also be trading weather.
Varilek says prices should be well supported by strong demand as USDA reported more flash sales this morning including 4.3 million bushels of soybeans to China and 5.35 million bushels of corn to Mexico both for this marketing year.
